A cut to the rebate, paid for off-road diesel usage, had been expected in the federal budget today but is now understood to be off the table.

Greens leader
Christine Milne
, whose party was largely behind a push for the cut, conceded on Sunday there did not seem to be “a lot of enthusiasm" for it.

The mining industry has been vocal in its opposition to the tax, calling it death by a thousand cuts to an industry already hurt by the impending introduction of the mining and carbon taxes.

Chamber of Minerals and Energy chief executive
Reg Howard-Smith
said he was not celebrating yet but understood the rebate to be safe.

He said the mining sector had fought hard to change the public perception that it was getting a free ride with the rebate. “Once you understand the rationale behind it [the rebate], you back off," he said.

“After two or three years of pretty bumpy times [for the sector], we’re hoping for an unremarkable budget."

Fortescue estimated the cost of a cut to the rebate at between $US140 million and $US150 million a year, or $US2 a tonne of iron ore.

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Mr Forrest also dismissed the importance of a budget surplus at any cost, saying he would prefer to see more job-building policies.“It’s a political line in the sand and anything this government has done for political reasons has ended in tears," he said.

The billionaire miner has traded public barbs with Treasurer
Wayne Swan
over the past few months and last week called for an early election, saying the government’s unpop­ularity was causing damage to the economy.

Independents
Tony Windsor
and
Bob Katter
have indicated they would not support the rebate being cut.